World Economy Requires European Union to Address Current Global Financial Struggles
The United States' departure from the post-World War II international system, under the administration of Donald Trump, has had significant repercussions on global economics, particularly in relation to China and Europe.
Trump's approach involved withdrawing from or weakening U.S. participation in international organisations and agreements that underpin the post-WWII order. This disruption undermined the established rules-based order and contributed to geopolitical friction with key stakeholders like China and Europe.
In the economic realm, this rejection influenced trade and diplomatic relations. The U.S. imposed tariffs and took confrontational stances on trade and technology issues vis-à-vis China, aiming to counter what it viewed as unfair practices but upsetting integrated global supply chains. Europe, on the other hand, sought to maintain the multilateral system and close cooperation within the frameworks established after WWII. These dynamics led to increased uncertainty in global markets and made global economic governance more fragmented.
Moreover, Trump’s administration's skepticism toward official data and institutions added an additional layer of uncertainty that affected confidence in the U.S. as a stable economic leader. This had implications for global economic perceptions and trust in U.S. policy reliability.
The 2025 Internationalization Report by Confindustria Lombardia highlights the need to forge industrial policies worthy of the times, with Trump being a symptom, more than the architect, of these times. The report also states that America now openly rejects the system it created after World War II, which was instrumental in the "miracle" of the European post-war.
Europe, as transformation economies, are vulnerable to a world in which the economy returns to being a tool of power responding to geopolitical, as well as industrial and profit, logics. The structure of European integration, a currency without a state, coexistence of countries with divergent productive apparatuses and security priorities, and a single market designed to favor tax competition at the expense of industrial policy, contributes to Europe's current weakness.
Italy, in particular, suffers more than others from problematic dependencies. Dependencies on the U.S. as a market, China as a supplier, and a confused Germany as a client in the supply chain, highlight Italy's vulnerabilities in the current global economic climate.
Meanwhile, China, in little more than thirty years, has deployed an arsenal capable of subverting the system. With its obsession with manufacturing primacy and mercantilist policies, China has become a formidable economic power, challenging the traditional global economic order.
The system, conceived at Bretton Woods (1944), functioned as an enormous tributary mechanism, with the U.S. serving as the final buyer of the world due to its ability to issue debt at will and possess the reserve currency. However, the U.S. trade deficit is a logical consequence of this system, allowing them to print money in low-inflation regimes to pay for imports that were increasingly replacing domestic production capacity. Oil exporters and Asian exporters parked their profits in dollars due to this system.
The international order is based on "one" law: that of the dominant power. The IMF and World Bank have become tools for disciplining debtors and discouraging them from seeking alternative currencies. This tributary order, invisible because it is financialized and uncontested because it has become the norm, has been disrupted by Trump's rejection of the post-WWII system.
In conclusion, the United States' rejection of the post-WWII system under Donald Trump weakened the cohesive global economic architecture, exacerbated tensions with China and Europe, and increased uncertainty and fragmentation in global economic governance.
- The Trump administration's withdrawal from international organizations and agreements, as well as their skepticism towards official data and institutions, has had a significant impact on global finance and politics, particularly in terms of challenging the established rules-based international order.
- The 2025 Internationalization Report by Confindustria Lombardia notes that America's rejection of the post-World War II system, with Trump being a symptom of these times, has implications for the international industry, as it contributes to geopolitical friction and the undermining of the established global economic order.
